Lean launchpad educators teaching handbook

The Lean
LaunchPad
Educators
Teaching Handbook
Steve Blank & Jerry Engel
July 2012

Preface
PURPOSE
This goal of this document is to give you the theory of why we created the Lean LaunchPad
class and the practice of how we have run it. However, it is neither a guide nor a cookbook
for a class. As educators we expect you to adopt and adapt the class to your own school and
curriculum as appropriate.

SCOPE
The Lean LaunchPad class was developed based on experience mostly at the graduate level
of several of the nation’s leading universities. It’s been taught both in engineering and business
schools, as well as to post-graduate teams under the NSF program. However, we believe the
methodology has broader applicability, and it is being adapted to undergraduate programs.

FOCUS
The focus of the Lean LaunchPad class has mostly been on scalable startups, often tech-based;
however, initial indications are that the approach is generalizable and can embrace the chal-
lenges faced by small and medium-sized businesses, as well as new ventures in large corpora-
tions.

ACKNOWLEDGEMENTS
-
ogy Ventures Program. Hats off to Kathy Eisenhardt and Tom Byers who gave us the freedom
to invent and teach the class.

The class would not have been possible without the two VCs who volunteered their time to
teach this Stanford class with me: Jon Feiber of Mohr Davidow Ventures and Ann Miura-Ko of
Floodgate. Lisa Forssell taught the “how to present class,” and Thomas Haymore was our inde-
fatigable Teaching Assistant. We also owe much to our team of mentors.

-
partment, and Jerry Engel and Jim Hornthal of CMEA Capital joined the teaching team.

by John Burke from True Ventures and Oren Jacobs of Toytalk. They were joined by teaching

class.

and their Executive Director, Phil Weilerstein. Their support and assistance has facilitated
two key deployments of the Lean LaunchPad method, namely the NSF I-Corps Program and
the Lean LaunchPad Educators Program. Their contribution is accelerating dissemination and
fostering best practices by supporting faculty education and collaborative peer to peer ex-
changes.

None of this would have been possible without Jerry Engel’s persistence and guidance.

—Steve Blank
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© 2012 Steve Blank

Table of Contents

1. The Lean LaunchPad Manifesto ......................................................................... 9
Strategy...............................................................................................................................9
Process ..............................................................................................................................9
Organization ................................................................................................................. 10
Education ........................................................................................................................11
Instructional Strategy ...................................................................................................12
Lessons Learned .............................................................................................................13

2. E-School: The New Entrepreneurship Curriculum .....................................14
3. The Lean LaunchPad Class–Goals ..................................................................17
Helping Startups Fail Less ............................................................................................17
Lean LaunchPad Pedagogy—Experiential Learning ..............................................17
The Flipped Classroom................................................................................................ 18
The Business Model Canvas ...................................................................................... 18
Customer Development ............................................................................................ 20

4. Teaching Team ......................................................................................................21
Faculty ...............................................................................................................................21
Teaching Assistant......................................................................................................... 22
Pre-class ........................................................................................................................................................ 22
During Class................................................................................................................................................ 22
Mentors & Advisors .................................................................................................... 22
The Role of Mentors .............................................................................................................................. 22
How Mentors Help Teams ................................................................................................................ 23
Mentors and Web-based Startups ........................................................................... 23
The Role of Advisors .............................................................................................................................. 23
Recruiting Mentors/Advisors ............................................................................................................ 23

5. Student Teams .....................................................................................................24
Team Formation—strategy ........................................................................................ 24
Team Formation—mixers/ information sessions .................................................. 24
Team Formation—admission ..................................................................................... 24
Admission By Interview..........................................................................................................................24
Admission By Teams, Not Individuals .......................................................................................... 25
Team Formation—Application Forms ..................................................................... 25

6. Class Organization.............................................................................................28
Team Projects ................................................................................................................ 28
Team Deliverables ........................................................................................................ 28
Student Team Coursework and Support Tools..................................................... 28
Class Culture.................................................................................................................. 29
Amount of Work .......................................................................................................... 29
Team Dynamics ............................................................................................................. 30
Sharing Policy ................................................................................................................. 30
Student/Instructor Success Criteria ......................................................................... 30
Process ........................................................................................................................................................... 30
Culture ............................................................................................................................................................31
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© 2012 Steve Blank

7. The 10-Week Course, 12-Week Course, 5-Day Course ..........................32
10-Week Course Logistics.......................................................................................... 32
Teaching Team Role and Tools .................................................................................. 33
Best Practices ................................................................................................................. 33
Lectures ........................................................................................................................... 34
LaunchPad Central........................................................................................................ 34
Textbooks ...................................................................................................................... 36
Grading ........................................................................................................................... 36
Guidelines for team presentations .......................................................................... 37

8. Instructor Pre-Course Preparation ...............................................................38
9. Detailed Class Curriculum ..............................................................................39
Student assignment—Before the Teams Show Up in Class ............................... 39
Class 1: Intro & Business Models and
Customer Development ............................................................................................. 41
Class 1 through 8: Presentation Agenda &
Teaching Assistant Activities ...................................................................................... 45
Class 2: Value Proposition .......................................................................................... 48
Class 3: Customer Segments ..................................................................................... 53
Class 4: Distribution Channels .................................................................................. 58
Class 5: Customer Relationships (Get/Keep/Grow) ............................................ 63
Class 6: Revenue Streams .......................................................................................... 69
Class 7: Partners .......................................................................................................... 72
Class 8: Resources, Activities and Costs ............................................................... 75
Workshop 3: Presentation Skills Training ............................................................... 78
Class 9 & 10: Lessons Learned Presentation ........................................................ 82

10. Collaborative Google Documents ...............................................................83
Appendix
11. 10-Week Syllabus—Sample ...........................................................................87
Lessons Learned—Demo Day Presentation Format ........................................... 96
Engineering 245: Frequently Asked Questions (FAQ) ......................................... 98

12. 5-Day Syllabus—Example.............................................................................104
13. Mentor Handbook—Sample .......................................................................114

1. The Lean LaunchPad Manifesto

startups like they are just smaller versions of large companies.

However, we now know that a startup is a temporary organization designed to search for a
-
ture, or it may be a new division or business unit in an existing company.

If your business model is unknown—that is, just a set of untested hypotheses—you are a start-

features, channels, pricing, Get/Keep/Grow strategy, etc.) is known, you will be executing it.
Search versus execution is what differentiates a new venture from an existing business unit.

1

STRATEGY

on until the 1990s. A business model describes how a company creates, delivers and captures
value. It became common vernacular to discuss business models, but without a standard
framework and vernacular, confusion reigned. In 2010, when Alexander Osterwalder pub-
lished his book Business Model Generation, he provided a visual ontology and a clear vernacular
that was sorely needed, and it became clear that this was the tool to organize startup hypoth-
eses.

The primary objective of a startup is to validate its business model hypotheses

and other well-understood management tools.

2

PROCESS
Yet as powerful as the Business Model Canvas
model) is, at the end of the day it was a tool for brainstorming hypotheses without a formal PAGE
way of testing them. 9
© 2012 Steve Blank

The processes used to organize and implement the search for the business model are Cus-
tomer Development and Agile Development. A search for a business model can occur in any new
business—in a brand new startup or in a new division of an existing company.

The Customer Development model breaks out all the customer-related activities of an early-

the “search” for the business model. Steps three and four “execute” the business model that’s
been developed, tested, and proven in steps one and two.

The steps:

Customer discovery
model hypotheses. Then it develops a plan to test customer reactions to those hypoth-
eses and turn them into facts.
Customer validation tests whether the resulting business model is repeatable and scal-
able. If not, you return to customer discovery.
Customer creation is the start of execution. It builds end-user demand and drives it into
the sales channel to scale the business.
Company-building transitions the organization from a startup to a company focused on
executing a validated model.

In the “search” steps, you want a process designed to be dynamic, so you work with a rough
business model description knowing it will change. The business model changes because start-
ups use customer development to run experiments to test the hypotheses that make up the

the time these experiments fail. Search embraces failure as a natural part of the startup pro-

the founders and change the model.

-
vice, channel, pricing, etc.), the organization moves from search to execution.

The product execution process—managing the lifecycle of existing products and the launch
of follow-on products—is the job of the product management and engineering organizations.

Waterfall development.

ORGANIZATION
Searching for a business model requires a different organization than the one used to execute a
plan. Searching customer development team led

or pivot the business model, and to do that they need to hear customer feedback directly. In

3

Companies in execution suffer from a “fear of failure culture
were hired to execute a known job spec. Startups with Customer Development Teams have a
“learning and discovery” culture for search. The fear of making a move before the last detail is
nailed down is one of the biggest problems existing companies have when they need to learn
how to search.

The idea of not having a functional organization until the organization has found a proven busi-
ness model is one of the hardest things for new startups to grasp. There are no sales, market-
ing or business development departments when you are searching for a business model. If
you’ve organized your startup with those departments, you are not really doing customer

4

EDUCATION

business plan-centric view that startups are “smaller versions of a large company.” Venture
capitalists who’ve watched as con-
tinue to insist that startups write business plans as the price of entry to venture funding. This
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© 2012 Steve Blank

continues to be the case even as many of the best VCs understand that business “planning,”
and not the “plan” itself, is what is important.

The trouble is that over time, this key message has gotten lost. As business school professors,
many of whom lack venture experience, studied how VCs made decisions, they observed the
apparently central role of the business plan and proceeded to make the plan, not the planning,
the central framework for teaching entrepreneurship. As new generations of VCs with MBAs

“that’s what I learned—or the senior partners learned—in business school.”)

Entrepreneurship educators have realized that a plan-centric curriculum may get by for
teaching incremental innovation, but won’t turn out students prepared for the realities of
building new ventures. Educators are now beginning to build their own E-School curriculum
with a new class of management tools built around “search and discovery.” Business Model
-

the management tools MBAs learn for execution.

5

INSTRUCTIONAL STRATEGY
Entrepreneurial education is also changing the focus of the class experience from case method
to hands-on experience. Invented at Harvard, the case method approach assumes that knowl-
edge is gained when students actively participate in a discussion of a situation that may be
faced by decision makers.

But the search for a repeatable business model for a new product or service is not a predict-
able pattern. An entrepreneur must start with the belief that all her assumptions are simply
hypotheses that will undoubtedly be challenged by what she learns from customers. Analyzing
-

es adds little to an entrepreneur’s knowledge. Cases can’t be replicated, because the world of
a startup is too chaotic and complicated. The case method is the antithesis of how entrepre-
neurs build startups—it teaches pattern recognition tools for the wrong patterns, and there-
fore has limited value as a tool for teaching entrepreneurship.

The replacement for the case method is not better cases written for startups. Instead, it
would be business model design: using the business model canvas as a way to 1) capture and
visualize the evolution of business learning in a company, and 2) see what patterns match
real-world iterations and pivots. It is a tool that better matches the real-world search for the
business model.

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eses in front of customers) is the classroom discussion, as all teams present. To keep track of

record the week-by-week narrative of their journey.

An entrepreneurial curriculum obviously will have some core classes based on theory, lecture
and mentorship. There’s embarrassingly little research on entrepreneurship education and
outcomes, but we do know that students learn best when they can connect with the material
in a hands-on way, personally making the mistakes and learning from them directly.

needs to search for certainty in a chaotic world.

LESSONS LEARNED
The search for the business model is the front end of the startup process
This is true in the smallest startup or largest company

Customer and Agile Development are the processes to search and build the model
Searching for the business model comes before executing it

Product management is the process for executing the model
Entrepreneurial education is developing its own management stack
Start with how to design and search for a business model
Add all the other skills startups needs
The case method is the antithesis of an entrepreneurial teaching method

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© 2012 Steve Blank

2. E-School: The New Entrepreneurship Curriculum
While the Lean LaunchPad class can be inserted and taught as part of an existing curriculum
in a business or engineering school, it is a harbinger of a completely new entrepreneurship

tools built around “search and discovery” of the business model.

The diagram below illustrates a notional curriculum built around these ideas. The sum of all

execution. Think of it as E-School versus B-school. Brief summaries of each of the classes are
below.

ENTREPRENEURSHIP COURSE SUMMARIES
ENTR 100: Introduction to Startups
This course is designed to give students a basic introduction to startups and entrepreneurship.
What is a startup? What are the types of startups? Why is a startup different from an existing
company? Who can be an entrepreneur? Why are founders different then employees?

small team-based experiential projects

ENTR 101: Innovation and Creativity
Where do ideas come from? How to recognize opportunities

Pedagogy—Lecture with small team-based experiential projects

ENTR 102: Business Model Design
Based around Osterwalders Business Model Generation text, this class gives students practice
in deconstructing existing business models as well as creating new ones.

Pedagogy—Lecture with business model cases

ENTR 103: Customer Discovery—Markets and Opportunities

technology…Is there a market? I have a market…Is there technology?); and market sizing.

Pedagogy—Lecture with small experiential projects

ENTR 104: Metrics that Matter—Startup Finance
Finance before the Income Statement, Balance Sheet and Cash Flow. How to test Customer
-

Pedagogy—Lecture with business model and customer discovery cases

ENTR 105: Startup Patent Law
Patents, trademarks, copyright, trade secrets, NDAs and contract. Which one to use and
when? What to patent? Why? When? What matters in a startup? What matters later? Differ-
ences by country. How to build a patent portfolio.

Pedagogy—Lecture with business model and customer discovery cases

ENTR 106: Building the Team—Startup Culture and HR
What is a Startup Culture? Why is it different? Culture versus management style. Founders,
early employees, mission, intent, values. Managing the growing startup.

Pedagogy—Lecture with business model and customer discovery cases, optional simulations

ENTR 107: Get, Keep and Grow—Sales and Marketing
How does a startup get, keep and grow customers? How does this differ for web, mobile and
-
ponents, etc.

Pedagogy—Lecture with simulations and experiential projects

ENTR 108: Agile Development
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© 2012 Steve Blank

Pedagogy—Lecture with small team-based projects

ENTR 109: User Interface Design

iterate and what to optimize.

Pedagogy—Lecture with small team-based projects

ENTR 150: From Founder to Operating Executive
Most founders don’t make the transition to operating exec. Yet the most successful large tech-
nology companies are still run by their founders. What skills are needed? Why is the transition

Pedagogy—Lecture with business model and customer
discovery cases

ENTR 200/202: The Lean LaunchPad
Experiential Business Model Design and Customer Development

-
sive and experiential.

3. The Lean LaunchPad Class–Goals
The Lean LaunchPad class is currently taught in colleges, universities, accelerators, incuba-
tors and for the National Science Foundation. It has also been taught inside of Fortune 1000
companies as a template for building new businesses. The class has different goals depending
where it’s taught and who the audience is.

In a graduate engineering or business school university class, the goal of the Lean LaunchPad
is to impart a methodology for scalable startups students can use for the rest of their careers.
When taught in an accelerator or incubator, the goal of the Lean LaunchPad is a series of
investor-funded startups.

When taught as part of corporate entrepreneurship, the Lean LaunchPad helps existing com-

Finally, the same Lean LaunchPad methodology, by emphasizing small business tactics, can be

HELPING STARTUPS FAIL LESS
The Lean LaunchPad doesn’t guarantee that startups will succeed more. It does guarantee
that if they follow this process they will likely fail less.

We do this by rapidly helping the Lean LaunchPad student teams to personally discover that
their idea is just a small part of what makes up a successful company.

Here’s how we do it.

LEAN LAUNCHPAD PEDAGOGY—EXPERIENTIAL LEARNING
The Lean LaunchPad is a hands-on program that immerses student teams in testing their busi-
ness model hypotheses outside the classroom. Inside the classroom, it deliberately trades off

The Lean LaunchPad uses the customer development process and the business model canvas

Experiential learning has been around forever. Think of the guilds, apprentices, etc. Mentors
were the master craftsmen. That’s the core idea of this class.

This class uses experiential learning as the paradigm for engaging the participants in discovery

of the classroom and learn by doing.

This is very different from how a business school-based “how to write a business plan” class
works. There, it assumes a priori a valid business model. In this Lean LaunchPad class, the

pivot). This results in the teams bringing market needs forward. Then they can decide if there’s
a business to be built.

What this class does not include is execution of the business model. In this course, implemen-
tation is all about discovery outside of the classroom. Once discovery has resulted in a high

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© 2012 Steve Blank

If the student teams continue with their companies, they will assemble the appropriate oper-

THE FLIPPED CLASSROOM

by a live instructor, the lectures can now become homework. Steve Blank has recorded eight
-

lectures in person.

THE BUSINESS MODEL CANVAS

Often there’s a lack of a shared and clear understanding of how a startup creates, delivers and

diagrammatically illustrate how that happens.

The canvas represents any company in nine boxes, depicting the details of a company’s prod-
uct, customers, channels, demand creation, revenue models, partners, resources, activities and
cost structure.

But in addition to using the business model canvas as a static snapshot of the business at a
single moment, frozen in time, Customer Development—and this class—extends the canvas
and uses it as a “scorecard” to track progress in searching for a business model.

the changes from the last week.

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© 2012 Steve Blank

Then, after the team agrees to the business model changes, they integrate them into what

During the next week any new changes are again shown in red. Then the process repeats
each week, with new changes showing up in red. Then a new canvas used for the week.

By the end of the class, teams will have at least 8 canvases. When clicked through one at a
time they show something never captured before: the entrepreneurial process in motion.

The Business Model Canvas as a Weekly Scorecard

CUSTOMER DEVELOPMENT
The Business Model Canvas is, at the end of the day, a tool for brainstorming hypotheses with-
out a formal way of testing them.

The process used to organize and implement the search for the business model is Customer
Development. And that search occurs outside the classroom.

The Customer Development model breaks out the customer-related activities into four steps.

and four “execute” the business model that’s been developed, tested, and proven in steps one
and two.

The Lean LaunchPad class focuses on the two “search” steps.

Customer discovery
model hypotheses. Then it develops a plan to test customer reactions to those hypoth-
eses and turn them into facts.
Customer validation tests whether the resulting business model is repeatable and scal-
able. If not, you return to customer discovery.
Startup Owners Manual as the text to teach Customer Devel-
opment concepts.

4. Teaching Team
While a single instructor and a part time teaching assistant can teach this class, the optimal
teaching team has a minimum of:

Two instructors
A teaching assistant
One Mentor per team

FACULTY
On its surface the class can be taught by anyone. The canvas and customer development do

offer to your students are the painful lessons you’ve learned building businesses. If you haven’t,

In a perfect world at least one of the instructors would be an adjunct with startup experi-

teaching team comments.

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change the perception of the investor on the teaching team. VCs will stop believing that a
business plan or a standard investor pitch deck is useful. They will understand that a customer PAGE
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© 2012 Steve Blank

discovery narrative and the business model canvas is a more effective tool to judge early stage
ventures.

TEACHING ASSISTANT
Given all the moving parts of the class, a teaching assistant keeps the trains running on time.
Here’s what they do.

Pre-class

Keep track of the student applications

During Class

Communicate in-class information to course participants
Collect weekly team presentations and manage the order of presentation timing
Create and manage three Google documents:
1. The instructor-grading sheet—used by the teaching team for grading and real-time
collaboration for instructors
2. The student-feedback grading sheet used by the students to offer feedback to their
-
ress of other teams rather than reading their email.)
The startup wisdom document which the TA uses to capture and post teaching

MENTORS & ADVISORS

Advisors are on-call resources for the entire class.

The Role of Mentors
Mentors are an extension of the teaching team, responsible for the success or failure of a
team with four students. The role of the mentors is to help the teams test their business
model hypotheses. Here’s what they do:

Offer teams strategic guidance and wisdom:

Offer business model suggestions
Identify and correct gaps in the teams business knowledge

Provide teams with tactical guidance every week:

weekly presentation before they present
Comment weekly on teams’ LaunchPad Central Customer Discovery progress

Meet one-on-one with teams at least twice during the class

If mentors can’t commit to the time to be a mentor, have them consider being an advisor.

How Mentors Help Teams
Team Mentors are involved on a regular basis with their teams throughout the course. Weekly
interaction and comments via the LaunchPad Central is the minimum expectation. Bi-monthly
face-to-face meetings are also expected. These should be scheduled at the mentors’ conve-
nience. Questions from mentors to their teams that are helpful are, “Have you considered
x?” “Why don’t you look at company z and see what their business model is and compare it

heuristics and experience they can apply when they leave the class. The class is about what
they learned on the journey.

MENTORS AND WEB-BASED STARTUPS
If a team is building a web-based business they need to get the site up and running during the
-
sumptions about minimum feature set, demand creation, virality, stickiness, etc.

The Role of Advisors
Advisors are a resource to the class and any of its teams for your particular domain expertise.

Advisors commit to:

twenty-four hours

Recruiting Mentors/Advisors
This class has no guest lectures. Getting mentors involved is not about having them come in
and tell war stories, nor is it having them teach students how to write a business plan or put

A core tenet of the course is that the nine building blocks of a business model are simply
hypotheses until they are validated with customers and partners; and since there are “no facts
inside the building, they need to get outside.” This means as part of this class they need to talk
to customers, channel partners, and domain experts and gather real-world data—for each
part of their plan.

You’re looking for experienced local entrepreneurs and investors who are willing to learn as
much as they will teach.

-
ity, relevant business experience, a generous spirit, and who understand the value of the busi-
ness model canvas and customer discovery. If you picked the right one, by the end of the class
they will understand that a customer discovery narrative and the business model canvas is an
important tool to build early stage ventures. PAGE
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© 2012 Steve Blank

5. Student Teams
Through trial and error we’ve learned that the class is best when:

it is team-based
it is interdisciplinary
admission is based on team composition

When taught as a graduate class, this means having a mix of students in each team from a va-
riety of academic backgrounds—business school, engineers, medical school, etc. When taught
as an undergrad class, it means having students across a diverse set of majors.

TEAM FORMATION— STRATEGY
We insist that the Lean LaunchPad class is open to students from all departments; engineer-
ing, business school, etc. The best teams are a mix of engineers and MBAs.

having the teaching team try to form teams creates zero team cohesion—“I didn’t do well
because you assigned me to people I didn’t like.”).

TEAM FORMATION—MIXERS/ INFORMATION SESSIONS

We have our teaching assistant organize an evening session, provide pizza, and create demand
by widely broadcasting how exciting the class is and provide the info session location with
posters over campus, emails to department lists, etc.

In the mixer, the teaching team introduces themselves and provides a short, ten-minute over-

has an idea for a team?” We go around the room and let each of those students introduce

Finally, we ask, “Who’s looking for a team to join?” We have those students introduce them-

if they can form teams.

TEAM FORMATION— ADMISSION
Admission By Interview

teaching team selects the best student teams for admission, as opposed to the best projects.

-
sion. We’ve taught the class using those rules and found that they greatly diminish the experi-

do.)

In the past we’d select the best ideas for admission. The irony is what we already knew that
almost every one of those ideas would substantively change by the end of the class.

Now we select for the best teams. What we look for is a balanced team with passion. Is there
a visionary, hacker and hustler on the team? Teams that just have great ideas but no ability to
implement them typically fail. When taught in a university we want the students to focus on a
scalable idea, i.e. one that can grow to 10s or 100s of millions of dollars.

When taught in colleges, the exact small class can be used to teach small business startups.

Admission By Teams, Not Individuals
Admission to the class is by team. We do not accept individual applications.

We found that having the students come in with a formed team accomplishes three things:

It saves weeks of class time. Students have met, gotten to know each other, have brain-
stormed their idea and are ready to hit the ground running.

their time, not yours.
Most importantly we get to select for passion, interest, curiosity and the ability to learn
on their own

As teams are formed in the mixers. the Teaching Assistant schedules team interviews during

Admission by cross-disciplinary team can be a challenge in the bureaucracy of the siloed
academic world. Depending on where the course is situated in your college or university, you
may run into the traditional “you can’t do that” attitude and rules. The business school may
want you to admit its own students regardless of skill or passion. Some may want to control
class admission by class bidding or some other system. Depending on sponsorship, depart-

to push these students really hard.

TEAM FORMATION— APPLICATION FORMS
Students apply as teams. They tell us about themselves and their team using the “Team Infor-

The teaching team interviews all teams.

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© 2012 Steve Blank

Figure 1: Lean LaunchPad Application—Team Information

Figure 2: Lean LaunchPad Application—Business Model Information

The business model canvas as an application form starts the teams thinking long before the

model? What product or service am I offering? Who are my customers? Etc.”

We set the pace and tempo of the class by having the teams present the business model

running.

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© 2012 Steve Blank

6. Class Organization
TEAM PROJECTS
Team projects can be a product or service of any kind. This can include software, physical

startup. We suggest that they consider a subject in which they are a domain expert, such as
something related to their personal interests or academic research. In all cases, they should
choose something for which they have passion, enthusiasm, and hopefully some expertise.

TEAM DELIVERABLES
Teams are accountable for the following deliverables:

Get outside the classroom and test all their business model hypotheses
Present a weekly in-class PowerPoint summary of their customer discovery progress

-
sures their progress
Build a physical product showing a costed bill of materials and a prototype
Teams building a web product build the site, create demand and have customers using
it. See

undertake a project they are not prepared to see through to completion.

STUDENT TEAM COURSEWORK AND SUPPORT TOOLS
The student teams have both in-class work and between-class assignments. In class, each team
presents their lessons learned presentation, summarizing their out-of-classroom customer
discovery. When they are not presenting, all teams peer-grade the presenting teams using a
shared Google Doc.

discovery narrative and an updated business model canvas using the LaunchPad Central tool
-

Figure 3; Student Assignments and Tools

CLASS CULTURE
Here’s what we tell the students:

Startups communicate much differently than inside a university or a large company. It is dra-
matically different from the university culture most of you are familiar with. At times it can feel

in time- and cash-constrained environments. We have limited time and we push, challenge,

tough—just like the real world. We hope they can recognize that these comments aren’t
personal, but part of the process.

engage in a real dialog with the teaching team. This approach may seem harsh or abrupt, but

and objectively, and to appreciate that as entrepreneurs they need to learn and evolve faster
than they ever imagined possible.

AMOUNT OF WORK
Here’s what else we tell the students:

other classes. Projects are treated as real start-ups, so the workload will be intense. Teams
have reported up to twenty hours of work per week. Getting out of the classroom is what

of time in between each of the lectures outside the class talking to customers. If they can’t
commit the time to talk to customers, this class is not for them.

This class is a simulation of what startups and entrepreneurship are like in the real world:

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© 2012 Steve Blank

This class pushes many people past their comfort zone. It’s not about them, but it’s also not

part of what it is really like.) The pace and the uncertainty pick up as the class proceeds.

TEAM DYNAMICS

teams. At times we’ve seen:

Students will enroll for the course but have overcommitted to other curricular or extra-
curricular activities

interest
Teams can’t agree on level of effort by each team member
Other team tensions

teaching team can help them diagnose issues and facilitate solutions. At times, all it takes is a
conversation about roles, expectations and desired outcomes from the class. If the problem is
more serious, make sure you document all conversations.

SHARING POLICY
We tell the students that one of the key elements of the Lean LaunchPad is that we get
smarter collectively. We learn from each other—from other teams in your class as well as from
teams that came before you.

This means that as part of the class, the teams will be sharing your customer discovery jour-
ney—the narrative of how their business model evolved as they got out of the building and
the details of the customers they talked to. At times they will learn by seeing how previous
classes solved the same class of problem by looking at their slides, notes and blogs. And they
will share your presentations and business model canvas, blogs and slides with their peers and
the public.

Just to be clear, this doesn’t mean sharing Intellectual Property, but it does mean sharing de-
tails of what you learned outside the building.

STUDENT/INSTRUCTOR SUCCESS CRITERIA
The success of this curriculum is dependent on a consistent set of beliefs and culture by the
students and instructors. The fundamental principles of the course are:

Process
1. There are no facts inside your lab or building, so get the heck outside.
2.
We use the business model canvas to articulate our hypotheses.
We use customer development to test those hypotheses.
We use the business model canvas to keep track of what we learned.
6. We expect that many of our initial hypotheses are wrong.
Iterations and pivots are the expectation.

Culture
1. A mindset of hypotheses-testing, not execution
2. Active participation by all team members
All are held accountable for team performance
High-speed pace and tempo

6. Bring your sense of humor—without it, you will suffer

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7. The 10-Week Course, 12-Week Course, 5-Day Course

three-hour meeting per week. Each has been a very successful format, but the course material
can be adapted an applied in various ways. In fact, in the Appendix we have included a syl-

and Caltech. For the sake of convenience and cogency, this document describes the ten-week

10-WEEK COURSE LOGISTICS
prior to the class for team formation
The class is offered once a week
Each class is three hours
-

Three workshops are offered outside of normal class hours for Customer Discovery

Week Lecture Topic
6 weeks prior
st
interviews
2 weeks prior
Week 1 Lecture 1 Intro, Business Models, and Customer
Development
Week 1 Workshop 1 Customer Discovery practice for the real world
Week 2 Lecture 2 Value Proposition
Lecture Customer Segments
Lecture Channels
Week 4 Workshop 2 Customer acquisition and activation
Lecture
Week 6 Lecture 6
Lecture Partners
Week 8 Lecture 8
Week 8 Workshop 3 Presentation Skills Training
Lessons Learned Lessons Learned Presentations teams 1-6
Week 10 Lessons Learned

TEACHING TEAM ROLE AND TOOLS
For each weekly class session, students are assigned:

Pre-class readings
optional pre-recorded on-line lecture with

An in-class, ten-minute presentation for each team presenting their “lessons learned”
from talking with customers
Weekly assignment to get out of the building and test one of the business model com-

The last weekly sessions are “Lessons Learned” presentations from each team. They
consist of a two-minute video plus an eight-minute PowerPoint presentation

In class, the role of the instructor is to:

1.
2.
tactics
Grade the student presentations and share private comments with the rest of teaching
team

BEST PRACTICES
Some of the best practices we’ve seen work well:

Trying hard not to offer students prescriptive advice. Instead, trying to teach the students
to see the patterns, not give them answers.
Adjuncts telling “war stories” with a lesson for the class.
Keeping in mind, that everything you’re hearing from students are hypotheses—guess-
es—that you want them to turn into facts.
-
sights.
But the goal is to get them to extract learning from the customer interactions.

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Figure 4: Teaching Team Responsibilities and Tools
LECTURES
Lectures take the students through each of the business model canvas components, while
teaching them the basics of customer development. The lecture slides are available in Pow-

LAUNCHPAD CENTRAL

keep track of their progress. Without some way of keeping detailed track of all teams’ prog-

-
tations.

To solve this problem, we insist that each team blog their customer discovery progress. We
force them to write a narrative each of week of customers they’ve visited, hypotheses they’ve
tested, results they’ve found, photos of their meetings, and changes in their business model

on-line mash-up of blogging tools); however, we favor using an integrated purpose built tool
called LaunchPad Central.

twenty-seven teams.

This tool allows the teaching team to comment on each of the teams’ progress posts and
interactively follow their progress in between class sessions.

This means that during the time between each class session, the teaching team needs to go
online and read and comment on each of the teams. You must do this each week. Then, when

LaunchPad Central Main Admin Page

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© 2012 Steve Blank

LaunchPad Central Team Admin Page

TEXTBOOKS

The Startup Owner’s Manual, The Step-by-Step Guide for Building a Great Company
and Bob Dorf, 2012)

Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers -
der Osterwalder, Yves Pigneur, 2010)

-

of what’s needed in team presentations

GRADING

lessons learned presentation. The grading criteria are as follows:

-
sentations each week. Team members must 1) update business model canvas weekly, and 2)
provide detailed narrative on customer conversations weekly.

GUIDELINES FOR TEAM PRESENTATIONS

Slide 1
with, what the team does)
Slide 2

Hypothesis: Here is what we thought
Experiments: So here’s what we did

Iterate: So here’s what we are going to do next

Feedback from the teaching team during oral presentations is where the most learning occurs.
Due to the pace and tempo of the course, participants must be held accountable to the mate-

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© 2012 Steve Blank

8. Instructor Pre-Course Preparation
Objective: Have a basic understanding of:

The Lean LaunchPad class
Business Model Canvas
Customer Development

1. Textbooks
Business Model Generation

Steven Blank, The Startup Owners Manual

2.

-

nd
-annual-international-

-
L1tF

9. Detailed Class Curriculum
STUDENT ASSIGNMENT—BEFORE THE TEAMS SHOW UP IN CLASS
Learning
Objectives What’s the difference between search and execution?
What is a business model versus business plan?
What is the business model canvas?
What are the nine components of the business model canvas?
What is a hypothesis?
What is Customer Development?
What are the key tenets of Customer Development?
Why? These are the fundamental principles of the course. Having the students
prep on their own time allows us to go into full-immersion on day one,

How? Assign readings before the class starts. Inform students that knowing
these

Teams present their canvas as the introduction to their cohort. But more

prepared for the course.
Reading
Assignment for
day 1 of the Business Model Generation
class
Startup Owners Manual

Team Prepare your team’s business model using the business model canvas
Assignment
for day 1
Assignment We don’t expect teams to get the canvas right. We just want them
Objective thinking hard about what it means. They will be living with the canvas for
the next few months.
Get the teams accustomed to a cover slide that provides us with a one-
page summary of who they are, number of customers talked to that
week, what their team does.
Presentation Prepare a two-slide presentation to present your team to the cohort:
Guidelines Slide 1: Title Slide
Slide 2: Business Model Canvas
See below for the presentation format
Hold Mentor
over the Mentor Handbook
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© 2012 Steve Blank

CLASS 1: INTRO & BUSINESS MODELS AND
CUSTOMER DEVELOPMENT
1st Team Presentation based on pre-class reading
In Person Lecture 0: Class Introduction
In Person Lecture 1: Business Models and Customer Development

Teaching Assess each team’s level of preparation and understanding.
Objective Introduce the business model canvas development principles.
Student
Presentations method.

Instructor initial business models is critical during this session to emphasize the
Critiques level of preparation necessary by the students.
Have students understand that there is no such thing as “spare time,”
and they need to be out of the building talking to customers.
Why? These are the fundamental principles of the course.
The format of all the classes will be:
Teams present in front of their peers

Instructors lecture on a component of the business model canvas
Having the students present on day one gives them full-immersion on

It also gives the teaching team the ability to provide remedial help for

In almost every class, one or two need coaching
How? Have teams start by presenting their business model canvases as their
introduction to the class
1.
models and team members. An interactive dialogue is encouraged.
2.
channels, customer relations and revenue model.
a. They’re usually wrong.
b. Don’t go deep on one team. It’s the sum of the comments
across the teams that is important.
c. When you see a common error, announce, “This is a big idea.
It’s one you will all encounter.”
d.
impressions of each team’s business model.
e. Have the students grade and comment their peers on the
student Google Doc grading sheet.

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Common 1. Business Model ignorance
student errors 2. Not understanding the difference between a value prop and features
on their 1st Not understanding any detail about their customers
presentation No understanding of a channel
Fantasy revenue model
6. Business Model canvas looks like a business plan
Thinking that they’re in the class to “execute” their plan, not search
for one
Lecture Start with Lecture 0, Introduction to the class and teaching team.
Learning Next have the teams present their business model canvases.
Objectives
Students will understand the level of hypotheses testing their business

Students should understand the concepts of:
Nine parts of a Business Model
Hypotheses versus facts
Getting out of the building

Iteration versus Pivot

Focus on the right half of the canvas
Students should understand the relationship between canvas
components:

Many startups spend years attacking a small market. Having them
think about size of the opportunity early helps them keep asking,
“How big can this really be? Is it worth doing?”

See key lecture concept diagrams below.

Lecture 0 Introduce the teaching team. Key concepts:
Class Start by saying the students are or will become domain experts in
Introduction
But we are the domain experts in building companies. We have
a model that works, is intensive and will make all of you work
extremely hard. It’s nothing personal.

Key Points
The class is all about “getting out of the building.”
The program is intensive and fast-paced.
The importance of actively grading their peers
Your technology is ONE of the many critical pieces necessary to build
a company and is part of the value proposition—customers do not
care about your technology; they are trying to solve a problem.

channels
Lecture 1 Intro of the business model canvas and customer development
Business
Model Canvas
& Customer Description of experiments
Development

How do you determine whether a business model is worth doing?

Reading for BMG,
next week SOM,

What’s a Startup? First Principles

A Startup is Not a Smaller Version of a Large Company
Twelve Tips for Early Customer Development Interviews
Assignment Lecture
for next week
Presentation
Identify your market size

Propose experiments to test your value proposition, customer
segment, channel and revenue model of your business model

what’s needed in tomorrow’s presentation
Talk to at least 5 potential customers

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Typical Class 1 Student Business Model Canvas—A business plan in small type

Tomorrow’s Slide 1: Cover slide
Presentation Slide 2: Current business model canvas with any changes marked
Guidelines

unknown

segment, value proposition, channel and revenue model of the
hypotheses

would you say that your hypothesis wasn’t even close to correct)?

CLASS 1 THROUGH 8: PRESENTATION AGENDA &
TEACHING ASSISTANT ACTIVITIES

Teaching Before Each Class
Assistant Communicate with students:
Activities for Topic to be addressed for class
Classes 1-8 Presentation Assignment
When presentations should be uploaded to DropBox
Team Presentation order
Allotted time for presentation
Location of presentation

Collect student slides beforehand so no individual computer setup is
necessary.
Then load them on a single presentation computer

minute to go
shared Google Doc grading sheets
One for the teaching team
A separate one for the students
capture the verbal teaching team critiques in a separate
Google Doc—this should be shared with all the teams.

This should be repeated for all classes

During Each Class
Time all presentations
Give students 1 minute warning

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Lecture 1: Key Concept Diagrams

Ensure students understand all the parts of the Business Model Canvas

Ensure students understand the four steps of Customer Development

Ensure students understand all the Hypothesis>Design>Test>Insight Loop

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CLASS 2: VALUE PROPOSITION
Team Presentation based on Business Model Canvas and Customer Development
Lecture
Lecture 2: Value Proposition (watched online before class or presented in person)
Teaching Set expectations for:
Objective
Student Annotation of the business model canvas updates
Presentations Their blog as “a customer discovery narrative”

Instructor
Critiques Customer calls are not optional. They need to be continuous.
Hypotheses need to be turned into facts. There are no facts inside

This class is not about the execution of their original idea.
How? The teams have spoken to after class
yesterday. They were supposed to set up meetings before they
arrived.

one.)
Stop their presentation. Have them leave to make phone calls.
Tell them if they have something to add before the rest of the
presentations are over, they can present.
Make the point clearly that this is what the class is about.
In today’s presentations, teams explain what they learned in those
calls.
Have them annotate the canvas with new learning each week.
Make comments to show you’ve read their blog and it’s critical to
update.
Make sure they are articulating their hypotheses of what they
expected to learn versus what they found. Without that it’s just a
bunch of random customer interviews
This “hypothesis>experiment>data>insight” loop is the core of the
process and class.
Common Not enough customer calls
student errors Vague data from the calls
on their 2nd Little to no insight from the data
presentation No clue about market size or overly optimistic

Did not articulate experiments to test their hypotheses

Optionally lecture is on-line. All students need to watch it before class.

Lecture 2 Students should understand:
Value The smartest teams believe “it’s all about my invention.”
Proposition Your goal is to teach them “it’s all about the business model.”
Learning The majority of product features are never used by customers.
Objectives
Engineers love to add features.
minimum feature set.
The difference in an MVP for a physical product versus the Low and

Explain why customer development can’t be done with Waterfall
engineering but needs an Agile Development process.

Lecture 2
Value How does it differ from an idea
Proposition
Identifying the competition and how your customers view these
competitive offerings
What’s the minimum viable product?
What’s the market type?
Insight into market dynamics or technological shift that makes this a
fresh opportunity?

Instructors should emphasize:
The difference between value proposition and feature sets
minimum viable product

The value of annotating the business model canvas
The need to be open to changing initial business model canvas
hypotheses

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Reading for BMG
Next Week SOM

Assignment Lecture
for Next
Week
Presentation

What is the resulting MVP?
Propose experiments to test your value proposition


Post discovery narratives
Presentation Slide 1: Cover slide
Guidelines Slide 2: Current business model canvas with any changes marked

Hypothesis: Here’s what we thought



Ensure students understand the three components of the Value Proposition

Casually introduce the three components of the Customer Segment

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Ensure students understand they have to articulate their hypotheses, design experiments, test, and
hopefully get insights

CLASS 3: CUSTOMER SEGMENTS
Team Presentation based on Value Proposition Lecture
Remote Lecture 3: Customer Segments
Teaching Continue the pace of discovery, customer calls, insights,
Objectives
Student Make sure teams continue to:
Presentations Annotate the business model canvas with updates

Instructor Critiques
proposition.
Acknowledge you’ve read their blog.
Comment on other egregious parts of the canvas as necessary.
Before they leave, make sure you solve any apparent team
dysfunctions.
How?
set.
Make sure they’ve articulated pain killers, gain creators, MVP.

value proposition is solving, and what gains it is creating
Which features will do that?
What is the MVP to prove the value proposition?
Start emphasizing the importance of diagrams for each
component of the business model
student errors
on their 3rd
presentation customers and here’s what they said…”)
Team thinks the purpose of the class is the execution of their idea
versus testing their hypotheses.
Still confused about the difference between a value proposition
versus features

Prop is not a spec sheet)
Did not articulate experiments to test their hypotheses.

Optionally this lecture is on-line. All students need to watch it before class.

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Customer Segments
Learning Customer pains and gains
Objectives Customer “Jobs to be done”

Problem versus Needs

decision makers, economic buyers and saboteurs
Market Type—explain the difference between Existing,

Explain why it matters to know which one you are in
The difference between single- and multi-sided markets
Lecture slides can be found here:

Why? Scientists and engineers usually have a vague sense of who will
buy.
Get them started with talking to their peers, others at
conferences, etc.

an idea and a successful company

awkward.

Lecture 3 Instructors should emphasize:
Customer Customers need to match their value proposition.
Segments
In a multi-sided market, each side of a market has its own value
proposition, customer segment, revenue model and may have its
own channel and customer relationships.

Reading for next BMG
week SOM
Assignment for Lecture
next week

Presentation
What are the Pains, Gains and Jobs to be done?
What is the resulting MVP?

Draw a diagram of your customer archetypes.

proposition solve it? How?
What was it that made customers interested? Excited?
If your customer is part of a company, who is the decision maker,
how large is their budget, what are they spending it on today,
how are they individually evaluated within that organization, and
how will this buying decision be made?

of what’s needed in tomorrow’s presentation.
Talk to at least ten potential customers.
Post discovery narratives.

segment?

from talking to customers?

Did anything change about Value Proposition?

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Ensure students understand the three components of
The Customer Segment

Ensure students understand the four Market Types

Example of a Customer Flow Diagram

Example of a Customer Archetype/Persona

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CLASS 4: DISTRIBUTION CHANNELS
Team Presentation based on Customer Segments Lecture
Remote Lecture 4: Distribution Channels
Teaching
Objectives Make sure teams continue to:
Student Annotate the business model canvas with updates
Include diagrams of each part of the hypothesis
Presentations
Instructor
Critiques
segments
Acknowledge you’ve read their blog
Comment on other egregious parts of the canvas as necessary
How? Most students usually think of customers as the users of the product
Make sure they understand there might be multiple customer

Make sure their presentation includes a customer archetype slide

Ask them if they can draw a day in the life of customer. If not, tell
them they don’t know enough.

customers have, what gains they are looking for, and what jobs they
want done.
Which features from the value prop will do that?

Give compliments to teams who drew archetypes and customer

Do not be polite to those who haven’t. If you can’t draw it you
don’t understand it.
student Vague data from the calls
errors on their PI appears to be doing all the customer calls
4th presentation Mentors driving the team to an early conclusion rather than learning
Little to no insight from the data
Most entrepreneurs start with a vague statement such as “customer
segments are end users”

Optionally this lecture is on-line. All students need to watch it before class.

Distribution
Channels Direct, Indirect and OEM
Learning Difference between physical and virtual channels
Objectives Types of physical and virtual channels
Distribution channel versus product complexity
Distribution Channel economics

See key lecture concept diagrams below

Why? Scientists and engineers think of sales as a tactic a salesperson uses.
Most entrepreneurs confuse channels with customers.
They do not understand an impact a channel can have on its
revenue streams.
The more complex the channel, the smaller the margins will be.

Distribution Channels need to match their customer segments
Channels
Channel economics need to match revenue goals

channel

Reading for SOM
next week
Assignment Lecture
for next week

Presentation
What is the distribution channel? Are there alternatives?
Draw the channel diagram
Annotate it with the channel economics

be? Did you learn anything different?
What was it that made channel partners interested? Excited?
Did anything change about Value Proposition or Customer
segment?

Talk to at least ten potential customers and channel partners
(Salesmen, OEMs distributors, etc.)
Post your discovery narratives

customers?

Did anything change about Value Proposition?

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Ensure students understand the
Physical Distribution Channels alternatives

Ensure students understand the
Web/Mobile Distribution Channels

Ensure students understand Direct Sales Channel Economics

Ensure students understand Reseller Channel Economics

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Ensure students understand OEM Sales Channel Economics

Ensure students understand Channel versus Product Complexity

CLASS 5: CUSTOMER RELATIONSHIPS (GET/KEEP/GROW)
Team Presentation based on Distribution Channels Lecture
Remote Lecture 5: Customer Relationships (Get/Keep/Grow)
Teaching
Objectives Make sure teams continue to:
Student Annotate the business model canvas with updates
Presentations
Instructor
Critiques channel

How? Most students confuse the channel with the users of the product
Make sure their presentation includes a channel diagram
Make sure the channel diagram has the economics on it

What type of channel they’d use
Why they would pick that one
How much it will cost them to use it
Ask, “Can you draw your channel map, showing how the product
moves from your startup to its end user, along with the costs and

Make sure they’ve diagrammed it.

Is it repeatable and scalable? Can they prove it?
What is the length of the sales cycle?
What are the critical points within that process?
Is your sales funnel predictable?
Common They may be stuck on their original customer segment or value prop
student By now some might need encouragement to pivot
errors on Some might be making lots of calls, getting lots of data but not have a
their 5th clue what it means
presentation Students often do not ask for an order or know what it takes to get
an order from the customer in their contact

They may not understand:
The relationship between a channel and its revenue streams
The more complex the channel the smaller the margins will be

Did not articulate experiments to test their hypotheses

Optionally this lecture is online. All students need to watch it before class.

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Customer How teams get customers into their sales channel and move them
Relationships successfully through the sales cycle
Get / Keep / How to keep them as customers and
Grow How to grow additional revenue from those customers over time.
Students should understand how to develop “get customer”
Learning experiments to determine tactics that move customers into and
Objectives through the sales funnel in a repeatable and scalable way.
Ensure that the students have an understanding of the concept of

Why? “Get, Keep and Grow” are among the most important hypotheses for
any startup to test.
Customer relationships are the result of a complex interplay among
customers, sales channel, value proposition and budget for marketing.
Businesses that successfully “Keep” their customers focus heavily on
retention.
Students should use strategies, tactics and metrics such as purchase
patterns, cohort analysis, complaints, and participation in “Grow”
efforts, amongst others.
Multi-sided markets need separate “Get, Keep and Grow” strategies

Customer
Relationships segments. Emphasis on repeatable and scalable relationship strategies
1.
Get / Keep /
a. Awareness Interest Consideration Purchase Keep
Grow
Customers
b.
Grow” a customer for their relevant market.
2. Demand creation—drives customers to chosen sales channels
a.

a. How to create end user demand
b. Difference between web and other channels
c. Evangelism vs. existing need or category
How demand creation differs in a multi-sided market

Reading for SOM
next week

Assessment”
Assignment Lecture
for next
week
Presentation
Talk to at least ten potential customers .
Build demand creation budget and forecast.

What is your customer lifetime value?

Channel?


Annotate it with costs to “Get” customers

customers?


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Ensure students understand Get/Keep Grow Customers for Physical Channels

Ensure students understand Consumer Acquisition Cost

Ensure students understand Lifetime Value

Ensure students understand Atrrition and Churn

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Ensure students understand Get/Keep/Grow Customers

CLASS 6: REVENUE STREAMS
Team Presentation based on Customer Relationships Lecture
Remote Lecture 6: Revenue Streams
Teaching Teams should be showing some real progress.
Objectives
Student Do not give up on the ones who seem lost; about half of those
Presentations surprise you.
Instructor Critiques Don’t let them slow down the pace of discovery and customer
calls.
Make sure teams continue to:
Annotate the business model canvas with updates


relationships
How? Ask, “What earned media activities do you plan to do for your
startup? What do you hope to achieve?”
Even though they won’t have time to do real demand creation

Ensure their diagrams show funnel and real $s for costs
Ask, “Do you know what your customers read, what trade shows
they attend, gurus they follow, and where they turn for new
product information?”
Common To most, marketing is even more of a mystery than sales.
student errors Let them know that the funnel is their magic decoder ring to
on their 6th marketing.
presentation Students often do not understand the difference between

startups.
Online marketing is important, even if the product and sales
channels are physical.

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Revenue Streams from each customer segment
Direct Sales, Licensing, Subscription
Within the revenue model—how do I price the product?
Learning Pricing is a tactic.
Objectives strategy.
This is not about income statement, balance sheet and cash

Revenue Streams Types of revenue streams

Pricing Tactics

market revenue models

Reading for SOM
Next Week
Assignment for Lecture
Next Week

Presentation
Talk to at least ten potential customers. Test pricing in front of

What’s the revenue model strategy?
What are the pricing tactics?
Draw the diagram of
What are the metrics that matter for your business model?

of what’s needed in tomorrow’s presentation


Pricing?



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CLASS 7: PARTNERS
Team Presentation based on Revenue Streams Lecture
Remote Lecture 7: Partners

Teaching Teams shold be showing some real progress.
Objectives
Student Do not give up on the ones who seem lost; about half of those
Objectives surprise you.
Don’t let them slow down the pace of discovery and customer calls.
Make sure teams continue to:
Annotate the business model canvas with updates

Acknowledge you’ve read their blog.

and pricing.
How? Ask:
What is your revenue model?
Why did you select it?
How do customers buy today?
What do they pay today?
What do competitors charge?

Common Students confuse pricing tactics with revenue model strategy.
student Students price on cost versus value.
errors on their No appreciation of competitive pricing or offerings; revenue adds up
7th presentation to a small business
Business too small for a company; should focus on licensing

Optionally this is lecture is online. All students need to watch it before class.
Partners What is a Partner?
Learning Types of Partners
Objectives
Suggestions related to selecting a Partner as a startup

Partners Who are Partners
The difference between strategic alliances, competition, joint
ventures, buyers, suppliers and licensees

do not do everything by themselves), strategic alliances and joint
partnerships are not needed to serve Earlyvangelists. They are
needed for mainstream customers.
For startups, Partners can monopolize your time.
Partners must have aligned goals and customers.
Some examples:

Strategic Alliances: Starbucks partners with Pepsi, create
Frappuccino
Joint Business Development: Intel partners with PC vendors
Coopetition: Automotive suppliers create AIAG
Key Suppliers: Apple builds iPhone from multiple suppliers

Reading for SOM
Next Week
Assignment Lecture
for Next
Week
Presentation
Talk to at least ten potential customers including potential partners
What partners will you need?
Why do you need them and what are risks?
Why will they partner with you?
What’s the cost of the partnership?

What are the incentives and impediments for the partners?

of what’s needed in tomorrow’s presentation.

Partners?



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CLASS 8: RESOURCES, ACTIVITIES AND COSTS
Team Presentation based on Partners Lecture
Remote Lecture 8: Resources, Activities and Costs
Teaching This is the last presentation.
Objectives Teams will want to slow down or stop calling customers. Don’t let
Student them slow down the pace of discovery and customer calls.
Presentations
Instructor
Critiques
How? Ask:
How many partners have you spoken to?
What alignment does this partner have with your customers?
What need do you solve for this partner and how important is it to
the partner?

How many partners are there like this?
Common Students think their business has to do everything and don’t realize
student the value of a partner in their value delivery.
errors on their Students assume getting a partner is a relatively easy process.
8th presentation Students confuse partnership interest with successful closing a
partnership deal.
Students confuse partnership closing with successful executing
partnership.

Lecture 8 Students should understand
Resources, Cover the four categories of resources
Activities and Cover the types of activities
Costs Talk about the effect of people upon the culture of the startup
Learning Enumerate the ways in which a startup’s intellectual property can be
Objectives protected
Add up all the costs. Is this a business? worth doing?
Lecture 8 Students should understand
Resources,
Activities and
Costs not be the right one to choose at this stage.
Activities: Manufacturing? Supply Chain? Problem Solving?
Costs: Fixed costs? Variable Costs?

Assignment Keep talking to ten customers a week
Final seven-minute presentation and two-minute video
Video
Presentation
Guidelines
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WORKSHOP 3: PRESENTATION SKILLS TRAINING
Teaching
Objectives
day, changing slides, editing video, reshooting interviews, and redoing
voiceovers while receiving comments and suggestions from the
instructors along the way. The emphasis is on how they present

compelling story.
Format Two weeks before the workshop
Teams are instructed to have early versions of all their presentation
materials available for online review by the presentation skills
instructors the week before this workshop.

One week before the workshop
Teams are reminded to email links to their presentations and videos.
Teams who follow these instructions receive initial comments and
suggestions via email a few days before the workshop.

The day of the workshop

Then, instructors walk the room and work with teams, one at a time.
Often, a comment or suggestion comes up that all the teams would

in the room and share learnings with everyone.
After a break, each team gives their presentation to instructors and
the other groups and receives notes in a formal practice session.

Assignment Students have two deliverables for the “Lessons Learned” Class:
Story Video: Two-minute video focused on your journey through
I-Corps as it relates to your business
Lessons Learned Slide Deck
presentation)
Best
Practices

learned about their particular product or service.

Teams who emailed YouTube links to their videos and slide decks
several days in advance got much better feedback, and had time to
act on the feedback.

accept YouTube links. Dropbox, and especially email attachments, are
not and drag the entire process to a standstill.

Story Video Think of the story video as the heart of the team presentation told with
Details video
(Two minutes) Suggested Story Video Outline
What are your names and what is your team’s name? Introduce

you work.
How many customers did you talk to?

When you started the class, what was the most important thing
you thought you would have to do to successfully launch a scalable
startup?
How do you feel about that now?
Thinking back across the class, who was the most interesting
customer you met and where did you meet them?
What happened??

conversation?

Now that the class is over, what was the most surprising thing you
learned in the class?

Teams need to see examples of story videos! Point the teams to good
examples including:

nsf

phi-optics-story-video-nsf

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© 2012 Steve Blank

Lessons Learned
PowerPoint
Presentation presentations. Here it is, in full:
(8 min) Story.

Show me, don’t tell me.
Arcs.
Beginning, middle, end.
Character, setting, plot.
Editing.
Notes.
Look before...
Practice!

Use (or enhance) the diagrams you developed in weekly
presentations to illustrate these points.

decks and video links that are emailed in advance. Spend the morning
sessions talking about the common pitfalls in team presentations.
Made sure Slide 1 has Team Name, your product, what business you
ended up in and the number of customers you talked to.
Every presentation requires a diagram of Customer Archetypes,

Every presentation requires hypotheses you tested, experiments you
ran, and results.
Final Slides—Click through each one of your business model canvas
slides.

Teams need to see examples of successful presentations! Point the teams
to good examples, including:

nsf-presentation

Common Students often make very bland story videos.
student errors
their technology, their customers, and their learning process. This is
Presentation and
video
can extrapolate to generality, which is what one wants an investor
to do.
Students often spend time thanking instructors, speaking excitedly
about the Lean Launchpad program, or making cheeky references or
inside jokes.
This is a big mistake, and can make years of research feel like a
Junior High School Science Fair Project. Students should spend
absolutely zero time on any of these topics, and all meta references
to how important teamwork is should be aggressively cut. This is
very hard for many students to internalize.
None of that has any place in a two-minute video about a
real company that is really trying to raise real money from real
investors. Investors will ascertain team dynamics for themselves
when they meet a given company and the people involved.
Students think they need to tell a whitewashed success story.
This is another mistake, and will damage their attempts at getting

Students must strive to tell the story of their mistakes, pitfalls
discovered,
and pivots made.

possible about the customers they actually met, what they actually
said, and how that changed
their business model canvases.
Students don’t label their axes on graphs, label their arrows in
diagrams, or make a legend showing their color coding scheme. They
should.

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© 2012 Steve Blank

CLASS 9 & 10: LESSONS LEARNED PRESENTATION
Teaching Teams present:
Objectives 2-minute video
8-minute Lessons Learned Presentation
Logistics All teams present in the same room
Split over two weeks

Appendix

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© 2012 Steve Blank

10. Collaborative Google Documents

Instructor Grading Document

Student Peer-Grading Document

11. 10-Week Syllabus—Sample
ENGR 245: The Lean Launch Pad

Course Title: Technology Entrepreneurship and Lean Startups
Units
Instructors: Steve Blank, Ann Miura-Ko, Jon Feiber
TAs: Thomas Haymore
Grading
Days and Times

Location: TBD
Webpage
Texts: Steven Blank, Four Steps to the Epiphany

Prerequisite

Goal: Provide an experiential learning opportunity showing how engineers, together with
scientists and other professionals, really build companies.

Course Description:
This course provides real world, hands-on learning on what it’s like to actually start a high-tech
company. This class is not about how to write a business plan. It’s not an exercise on how smart
you are in a classroom, or how well you use the research library to size markets. And the end
result is not a PowerPoint slide deck for a VC presentation -
bator where you come to build a “hot idea.”

This is a practical class—essentially a lab, not a theory or “book” class. Our goal, within the con-
straints of a classroom and a limited amount of time, is to create an entrepreneurial experience
for you with all of the pressures and demands of the real world in an early stage start up.

You will be getting your hands dirty talking to customers, partners, and competitors, as you
encounter the chaos and uncertainty of how a startup actually works. You’ll work in teams
learning how to turn a great idea into a great company. You’ll learn how to use a business
model to brainstorm each part of a company and customer development to get out of the

on the customer and market feedback you gathered, you will use agile development to rapidly
iterate your product to build something customers would actually use and buy. Each block will
be a new adventure outside the classroom as you test each part of your business model and
then share the hard earned knowledge with the rest of the class.

class.

Class Culture:
Startups communicate much differently than inside a university or a large company. It is
dramatically different from the university culture most of you are familiar with. At times it can feel
brusque and impersonal, but in reality is focused and oriented to create immediate action in
time- and cash-constrained environments. We have limited time and we push, challenge, and

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87
© 2012 Steve Blank

the real world. We hope you can recognize that these comments aren’t personal, but part of
the process.

a real dialog with the teaching team. This approach may seem harsh or abrupt, but it is all part

that as entrepreneurs you need to learn and evolve faster than you ever imagined possible.

Amount of Work:
This class requires a phenomenal amount of work on your part, certainly compared to many other
classes. Projects are treated as real startups, so the workload will be intense. Teams have
reported up to twenty hours of work per week. Getting out of the classroom is what the effort
-
tween each of the lectures outside your lab talking to customers. If you can’t commit the time
to talk to customers, this class is not for you.

This class is a simulation of what startups and entrepreneurship is like in the real world:

This class pushes many people past their comfort zone. It’s not about you, but it’s also not

part of what it is really like.) The pace and the uncertainty pick up as the class proceeds.

Team Organization:
This class is team-based. Working and studying will be done in teams. You will be admitted as a
team. Teams must submit a proposal for entry before the class begins. Projects must be ap-
proved before the class.

Team projects can be software, a physical product, or service of any kind. The teams will self-

constant parsing and allocating of the tasks that need to be done.

-
preneur or VC) to provide assistance and support.

Suggested Projects:

in which you are a domain expert, such as your graduate research. In all cases, you should
choose something for which you have passion, enthusiasm, and hopefully some expertise.
Teams that select a web or mobile-based product will have to build the site for the class. Do not
select this type of project unless you are prepared to see it through.

Deliverables:
Teams building a physical product must show us a costed bill of materials and a prototype.

1. Teams building a web product need to build the site, create demand, and have customers
using it. See -
.
2.
LaunchLab. It’s how we measure your progress.)
Your team will present a weekly in-class Powerpoint summary of progress.

Grading Criteria:

each week
Team members must:

1. weekly
2. Identify which team member did which portion of the work
Submit a detailed report on what the team did each week
Submit a weekly email of team member participation

Class Roadmap
Each week’s class is organized around:

Student presentations on their “lessons learned” from getting out of the building and
iterating or pivoting their business model.
Comments and suggestions from other teams, and teaching teams on the lessons
learned.

from Business Model Generation).

“Genius is the ability to make the most mistakes in the shortest amount of time.”

Pre-class Preparation
Read:

Business Model Generation.
2012 Four Steps to the Epiphany

Teams:

Form teams of four

Idea Approval

Attend a meeting with the teaching teach in Nov or December
th,
submit your team project for approval to the teaching team

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© 2012 Steve Blank

_______________________________________________________________

1. Jan 10th: Intro/Business Model/Customer Development

What’s a business model? What are the nine parts of a business model? What are hypoth-
eses? What is the Minimum Feature Set? What experiments are needed to run to test busi-
ness model hypotheses? What is market size? How to determine whether a business model is
worth doing?

Read:

Business Model Generation,

Deliverable for January 17th:

Write down hypotheses for each of the nine parts of the business model.
Come up with ways to test:

Each of the hypotheses

you say that your hypothesis wasn’t even close to correct)?

___________________________________________________________________

2. Jan 17th: The Value Proposition

Class Lecture/Out of the Building Assignment:

What is your product or service? How does it differ from an idea? Why will people want
it? Who’s the competition and how does your customer view these competitive offerings?
Where’s the market? What’s the minimum feature set? What’s the Market Type? What was

have into the market dynamics or into a technological shift that makes this a fresh opportu-
nity?

Action:

Read:

Four Steps to the Epiphany
The Blue Ocean Strategy pages 3-22

Deliverable for Jan 18th:

Find a name for your team.
What were your value proposition hypotheses?
What did you discover from customers?

Submit interview notes, present results in class.

___________________________________________________________________

3. Jan 24th: Customers/users /payers


How is a business customer different from a consumer?
Action:

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© 2012 Steve Blank

Read:

-

Deliverable for Jan 25th:

What were your hypotheses about who your users and customers were? Did you learn
anything different?

Submit interview notes, present results in class. Did anything change about Value
Proposition?

If your customer is part of a company, who is the decision-maker, how large is the bud-
get they have authority over, what are they spending it on today, how are they individu-
ally evaluated within that organization, and how will this buying decision be made?
What resonates with customers?
For web startups, start coding the product. Setup your Google or Amazon
cloud infrastructure.

___________________________________________________________________

4. Jan 31st: The Channel


What’s a channel? Direct channels, indirect channels, OEM. Multi-sided markets. B-to-B

Action: If you’re building a web site, get the site up and running, including minimal fea-
tures.
-
ners.

Deliverable for Feb 1st :

For web teams:
Get a working web site and analytics up and running. Track where your visitors

differs. What were your hypotheses about your web site results?
Submit web data or customer interview notes; present results in class.

What is your assumed customer lifetime value? Are there any proxy companies
that would suggest that this is a reasonable number?

For non-web teams:

What is your customer lifetime value? Channel incentives—does your product or
proposition extend or replace existing revenue for the channel?

What kind of initial feedback did you receive from your users?
What are the entry barriers?

___________________________________________________________________

5. Feb 7th: Customer Relationships/Demand Creation


How do you create end-user demand? How does it differ on the web vs. other chan-
nels? Evangelism vs. existing need or category? General Marketing, Sales Funnel, etc
Action:

If you’re building a web site:
A small portion of your site should be operational on the web

* Ask your users to take action, such as signing up for a newsletter.
*
* Change messaging on site during the week to get costs lower; team that gets
lowest delta costs wins.
If you’re assuming virality of your product, you will need to show viral propaga-

experiments.

If non-web,
Build demand creation budget and forecast.
* Get real costs from suppliers.
Read:


startup-metrics-for-pirates-seedcamp-2008-presentation

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© 2012 Steve Blank

Watch:

Deliverable for Feb 8th

Submit interview notes; present results in class.

Present and explain your marketing campaign. What worked best and why?

___________________________________________________________________

6. Feb 14th: The Revenue Model


What’s a revenue model? What types of revenue streams are there? How does it differ
on the web versus other channels?
Action: What’s your revenue model?
How will you package your product into various offerings if you have more than one?
How will you price the offerings?

What are the risks involved?
What are your competitors doing?

Read:

Getting to Plan B

Deliverable for Feb 15th :

Assemble an income statement for your business model. Include lifetime value calcula-
tion for customers.


__________________________________________________________________

8. Feb 21st: Partners


Who are partners? Strategic alliances, competition, joint ventures, buyer
supplier, licensees.
Action: What partners will you need?
Why do you need them and what are risks?
Why will they partner with you?
What’s the cost of the partnership?
Talk to actual partners.

Deliverable for Feb 22nd

Assemble an income statement for the your business model.

Demand Creation?
What are the incentives and impediments for the partners?

___________________________________________________________________

9. Feb 28th: Key Resources & Cost Structure


What resources do you need to build this business? How many people? What kind? Any
hardware or software you need to buy? Any IP you need to license? How much money

vs. when do you pay others?
Action: What’s your expense model?
costs in your business model?
Costs vs. ramp vs. product iteration?
Access to resources: What is the best place for your business?

Deliverable for March 1st

Assemble a resources assumptions spreadsheet. Include people, hardware, software,

When will you need these resources?

Submit interview notes, present results in class. PAGE
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© 2012 Steve Blank

Guest:

Alexander Osterwalder

For March 1st or 8th

__________________________________________________________________

10. March 6th: Team Presentations of Lessons Learned (1st half of the class)

Deliverable:

Each team will present a thirty-minute “Lessons Learned” presentation about their business.

_______________________________________________________________

11. March 13th: Team Presentations of Lessons Learned (2nd half of the class)

Deliverable: Each team will present a thirty-minute “Lessons Learned” presentation about
their business.

LESSONS LEARNED—DEMO DAY PRESENTATION FORMAT
Deliverable: Each team will present a thirty-minute “Lessons Learned” presentation
about their business.
Slide 1—Team Name, with a few lines of what your initial idea was and the size of
the opportunity
Slide 2—Team members—name, background, expertise and your role for the team

up your own).
Here was our original idea.

up your own).
We iterated or pivoted…explain why and what you found.

up your own).
We iterated or pivoted…explain why and what you found.

Side n—“So here’s where we ended up.” Talk about:
What you learned
Whether you think this a viable business,
Whether you want to purse it after the class, etc.
Final Slides—Click through each one of your business model canvas slides.

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© 2012 Steve Blank

ENGINEERING 245: FREQUENTLY ASKED QUESTIONS (FAQ)
Enrollment
Admission is by teams of four.
Teams must interview with the teaching team prior to the class start date.
Enrollment application closes the week before the class.

th

There’s a mandatory student mixer prior to the class Wednesday, December xx and
-
tors.
Students

Non-graduates and non-students can serve as advisors to the teams, but our priority is
providing a learning environment for Stanford graduate students.
Each team must have at least four Stanford graduate students.
Exceptions for team size and external members will be made on a case-by-case basis.
Note your special team needs on your application form. We will let you know on Day
One of the class.

This is very intense class with a very high workload. We expect you to invest at least

Company Ideas
Is this class for web startups only?
No, anyone with any idea and preferably a product can form or join a team.

What if I do want to test a web idea?
Great. The only condition is that you have to get the site up and deliver the minimum product

Team Formation
Do I need to be part of a team before I enroll in class?
Yes.

Does my team need to have a product/business idea to enroll in E245?
Yes

How do teams form? Will I be assigned to a team?
We do not assign members to teams. The mixer sessions will introduce you to
potential team members.

How many people compose a team?
Typically four.

Attendance and Participation

class is not for you.

and oriented to create immediate action in time- and cash-constrained environments.

notify your team members and teaching team and drop the class.
If you expect to miss a class, please let the TAs and your team members know ahead
of time via email.
We cold call in class. Be prepared.
We expect your attention during our presentations and those of your fellow students.
If you’re getting bored, tired, or inattentive, step outside for some air. If we see reading
email or browsing the web we will ask you to leave the class.

Intellectual Property
Who owns the intellectual property tested in the Business Model?
1.
brought to class with you. No one has claim to anything you brought to class.
2.
based project) developed during class. If a team is working with a Stanford related-

understand any Stanford licensing and royalties issues.

company you’ve worked at has to inventions you make at school.
If any of you decide to start a company based on the class, you own only what was
written and completed in the class. You have no claim for work done before or after

If a subset of the team decides to start a company they do NOT “owe” anything to any
other team members for work done in and during the class. All team members are free

modicum of common sense and fairness would apply.)
I feel my idea/Business Model may become a real company and the “next killer app,” and I want to
own it myself. What should I do?

shared. Your team owns everything done in class. Discuss Intellectual Property rights with
your team from the beginning. If you can’t come to agreement with the team, join another

class is public.

Will my Intellectual Property rights be protected when I discuss my ideas with the class?
NO. This is an open class. There are no non-disclosures. All your presentations and Customer
Discovery and Validation notes, business model canvas, blogs and slides can, and more likely
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99
© 2012 Steve Blank

This class is not an incubator. At times you will learn by seeing how previous classes
solved the same class of problem by looking at their slides, notes, and blogs.
Keep in mind that successful companies are less about the original idea and more about

must be prepared to share your ideas openly with the class. It is a forum for you to
“bounce” your ideas off your peers.
I’m not comfortable sharing what I learn with others. What should I do?
Don’t take this class.

Help!
What kind of support will our team have?
The teaching team consists of three professors, two TAs, and at least two mentors per team.
A mentor is an experienced entrepreneur or venture capitalist assigned to your team. They’ve
volunteered to help with the class and your team because they love startups. Their job is to
guide you as you get out of the building.

How often can we/should we meet with our mentors?
Your mentor is expecting to meet with you at least every two weeks face-to-face. You can
email them or meet with them more often as they have time.

Can I talk to a mentor not assigned to my team?
By all means, do so. All the mentors are happy to help. However, they cannot support your
team full-time unless your mentor decides to swap places with them.

I have a busy schedule and my mentor can’t meet when I want them to.
Mentors have day jobs. Asking them to meet or reply to you ASAP is not acceptable. So plan
ahead to allow for a reasonable amount of time for a reply or meeting. Be concise with your

I need help now.
-

sooner, email us.

Who are the Mentors?
See the mentor list at the end of this document and on the class website.

Team Dynamics
What roles are in each team?
Traditionally, each team member is part of the “customer development team.” You have to

What if my team becomes dysfunctional?

team. Do not

What if one of my teammates is not “pulling his/her weight”?
Try to resolve it within your team. If the situation continues longer than a week, please ap-
-
tion.

Grading
How do you determine our grade?

each week.
Team members must:
weekly
Identify which team member did which portion of the work
Provide a detailed report on what the team did each week
Provide a weekly email of team member participation

Does everyone in the team get the same grade?
No. Individual participation and contribution is also considered. You get to grade your team
members on their contribution.

What kind of feedback can I expect?

your attention.

Can I take this class Pass/NoCredit?
No. Letter grade only.

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© 2012 Steve Blank

Teaching Team
Steve Blank—Lecturer, Stanford Technology Ventures Program
sblank@stanford.edu
@sgblank

Jon Feiber—General Partner Mohr Davidow
Jdf@mdv.com

Ann Miura-Ko General Partner Floodgate

Teaching Assistants
Bhavik Joshi—Better Place, Bus Dev Asia, Co-Founder Berkeley Stanford Cleantech Confer-
ence Series
joshibhavik@gmail.com
@joshi_bhavik

Steve Blank

After twenty-one years in eight high technology companies, Steve

-
tor companies, Zilog and MIPS Computers; a workstation company

-
er peripheral supplier, SuperMac; a military intelligence systems sup-

After he retired, Steve wrote a book about building early stage
companies called Four Steps to the Epiphany. He moved from being
an entrepreneur to teaching entrepreneurship to both undergraduate and graduate students

MBA program.

department of Management Science and Engineering. In 2010, he was awarded the Earl F.

Steve followed his curiosity about why entrepreneurship blossomed in Silicon Valley and was
stillborn elsewhere. It has led to several talks on The Secret History of Silicon Valley.

-
mission, the public body which regulates land use and public access on the California coast.

Jon Feiber
It was a chance meeting that brought Jon Feiber into the
venture industry. Jon, then a vice president at Sun Micro-
systems, was considering leaving Sun for a startup. After a
preliminary discussion about the startup at Mohr Davidow,

Today, he is among Mohr Davidow’s most senior partners
-
ments. Most of Jon’s investments harness emerging technol-
ogy. “I like the intersection of emerging technology and big
markets—geeky projects,” he admits.

He began his career as a software programmer for main-
frame maker Amdahl Corp. “I tend towards entrepreneurs
who have real insight into hard problems and a sense of their
need by customers.”

Mohr Davidow, he believes, will remain one of the technology industry’s most successful inves-

for being direct and open in its relationships with entrepreneurs,” he explains. “Our enthusi-
asm for the entrepreneur is matched by depth of knowledge and experience in the areas that
we choose to invest in.”

“Being a venture capitalist is one of the greatest jobs you can have,” he continues. “I get to
hang out with the smartest people in the world and help them turn their ideas into world
class companies.”

Jon holds a bachelor’s degree in computer science and mathematics and astro-physics from

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© 2012 Steve Blank

12. 5-Day Syllabus—Example
COLUMBIA B7739-002: ADVANCED ENTREPRENEURSHIP

Instructors: Steve Blank, Bob Dorf, and Alexander Osterwalder

Credits

TAs: Christopher Fong and Dennis Kwon

Days and Times

Location

Texts: Steve Blank and Bob Dorf, The Startup Owner’s Manual


Prerequisite

Pre-class Assignments:

Business Model Generation.
The Startup Owner’s Manual

each team made over the course.)

Each team comes into the 1st day of class:

With a Business Model Canvas. You will present for three minutes on Day One.

s not in session

Goal: provide an experiential learning opportunity showing how startups and new
ventures are built.

Course Description:

This course provides real world, hands-on learning on what it’s like to actually start a scalable
company. This class is not about how to write a business plan. It’s not an exercise on how
smart you are in a classroom, or how well you use the research library to size markets. And
the end result is not a PowerPoint slide deck for a VC presentation.

This is a practical class—essentially a lab, not a theory or “book” class. Our goal, within the
constraints of a classroom and a limited amount of time, is to create an entrepreneurial
experience for you with all of the pressures and demands of the real world in an early stage
startup.

You will be getting your hands dirty talking to customers, partners, and competitors, as you
encounter the chaos and uncertainty of how a startup actually works. You’ll work in teams
learning how to turn a great idea into a great company. You’ll learn how to use a business
model to brainstorm each part of a company and customer development to get out of the

be a new adventure outside the classroom as you test each part of your business model and
then share your hard-earned knowledge with the rest of the class.

Class Culture
Startups communicate much differently than inside a university or a large company. It is dra-
matically different from the corporate culture most of you are familiar with. At times it can
immediate action
in time- and cash-constrained environments. We have limited time and we push, challenge,

like the real world. We hope you can recognize that these comments aren’t personal, but
part of the process.

Amount of Work
This class requires a lot of work on your part, certainly compared to many other classes. This class
is a simulation of what startups and entrepreneurship are like in the real world: chaos, uncer-

Team Organization
This class is team-based. Working and studying will be done in teams.

Team projects can be software, physical products, or services of any kind. The teams will self-

constant parsing and allocating of the tasks that need to be done.

Class Roadmap
Each day’s class is organized around:

Student presentations on their “lessons learned” from getting out of the building and
iterating or pivoting their business model.
Comments and suggestions from other teams, and teaching teams, on the lessons
learned.

taken from Business Model Generation).

“Genius is the ability to make the most mistakes in the shortest amount of time.”

___________________________________________________________________

MONDAY, APRIL 16TH

Lecture 0: Class Introduction

Teaching Team Introductions
Class Goals
Teaching Philosophy
Expectations of You
PAGE
105
© 2012 Steve Blank

_______________________________________________________________

Working Lunch

_______________________________________________________________

Lecture 1: Business Model/Customer Development

What’s a business model? What are the nine parts of a business model? What are hypotheses?
What is the Minimum Feature Set? What experiments are needed to run to test business
model hypotheses? What’s “getting out of the building?” What is market size? How do you
determine whether a business model is worth doing?

_______________________________________________________________

Lecture 2: Customer Discovery—The Art

Class Lecture: How to Talk to Customers

_______________________________________________________________

Get out of the building!

We expect you to have set up meetings to talk to potential customers in the New York Area.

-

In a startup there is no “spare time.”

___________________________________________________________________


You will be presenting your results tomorrow morning.

Market size
Type of business: IP, licensing, startup, unknown
Proposed experiments to test customer segment, value proposition, channel and rev-
enue model of the hypotheses:

your hypothesis wasn’t even close to correct)?
___________________________________________________________
___________________________________________________________

TUESDAY, APRIL 17TH

Team Presentations

Slide 2: Current business model canvas with any changes marked

-
tion, channel and revenue model of the hypotheses:

that your hypothesis wasn’t even close to correct)?
___________________________________________________________________

Lecture 3: Value Proposition / Customer Segments

Class Lecture: Value Proposition

What is your product or service? How does it differ from an idea? Why will people want
it? Who’s the competition and how does your customer view these competitive offerings?
Where’s the market? What’s the minimum feature set? What’s the Market Type? What was

have into the market dynamics or into a technological shift that makes this a fresh opportu-
nity?
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107
© 2012 Steve Blank

reach them? How is a business customer different from a consumer? What’s a multi-sided
market? What’s segmentation? What’s an archetype?

_______________________________________________________________

Working Lunch

_______________________________________________________________

Lecture 4: Business Model Canvas Examples

Class Lecture: Best practice examples in the evolution of business models.

___________________________________________________________________

Lecture 5: Corporate Entrepreneurship—Part I

Class Lecture: The Startup inside of a company

Sustaining versus disruptive innovation. Impediments to innovation.

___________________________________________________________________



___________________________________________________________________

Deliverables for Wednesday, April 18th

Team Presentation for tomorrow, Wednesday, April 18th

Get out of the building and talk to as many people as you can.
What were your value proposition hypotheses?
Get out of the building and begin to talk to customers for April 18th .
What did potential customers think about your value proposition hypotheses?

___________________________________________________________
___________________________________________________________

WEDNESDAY, APRIL 18th

Team Presentations

Slide 1: Cover slide



___________________________________________________________

Lecture 6: Channels / Get, Keep, Grow / Revenue Model

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© 2012 Steve Blank

What’s a channel? Physical versus virtual channels. Direct channels, indirect channels, OEM.

business to consumer).

How do you Get, Keep and Grow customers? How does it differ on the web versus other
channels? Evangelism vs. existing need or category? General Marketing, Sales Funnel, etc. How
does demand creation differ in a multi-sided market?

What’s a revenue model? What types of revenue streams are there? What are pricing tactics?
How does revenue model and pricing differ on the web versus other channels? How does this
differ in a multi-sided market?

___________________________________________________________________

Working Lunch

___________________________________________________________________


Class Lecture: Best practice examples

___________________________________________________________________

Lecture 8 : Corporate Entrepreneurship—Part II

Class Lecture: The Startup inside of a company

Sustaining versus disruptive innovation. Impediments to innovation.

___________________________________________________________________



___________________________________________________________________


anything different?

Present and explain your marketing campaign. How will you get customers?
Did anything change about your Value Proposition?
___________________________________________________________
___________________________________________________________

THURSDAY, APRIL

Team Presentations


customers?


______________________________________________________________

Guest Speaker: Fred Wilson, Union Square Ventures

___________________________________________________________________

Team Presentations: 10 minutes each (all teams)—continued

___________________________________________________________________

Working Lunch

___________________________________________________________________

Lecture 9: Partners, Key Resources & Activities

Class Lecture: Who are partners?

Strategic alliances, competition, joint ventures, buyer supplier, licensees. What resources do
you need to build this business? How many people? What kind? Any hardware or software
you need to buy? Any IP you need to license? How much money do you need to raise? When?
Why? PAGE
111
© 2012 Steve Blank

___________________________________________________________________


Class Lecture: Best practice examples

___________________________________________________________________



Deliverables for Friday, April 20th:

Business Model Generation, pages 200-211

Final Team Presentation for Friday, April 20th

___________________________________________________________

___________________________________________________________

FRIDAY, APRIL 20TH

Team Final Presentations


customers?

___________________________________________________________________

Time: 12:00—1:00 pm

Lunch

___________________________________________________________________

Time: 1:00—2:00 pm

Team Final Presentations, continued

___________________________________________________________________

Lecture 11: Costs and Metrics that Matter

Pivot or Proceed: What data you need to assemble, and how to determine whether you have
validated your business model to the point where moving forward makes sense.

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© 2012 Steve Blank

13. Mentor Handbook—Sample

E245
The Lean LaunchPad
Mentor and Advisor Handbook

Classes meet 4:15 -7:05 pm

Yang and Yamazaki Environment and Energy (Y2E2) building—Room 111

Professors:

Steve Blank sblank@kandsranch.com

Jon Feiber jdf@mdv.com

Teaching assistants:

Thomas Haymore thomas.haymore@gmail.com

Welcome as a team mentor or advisor Lean Launchpad course in
Stanford School of Engineering.

Mentors

Advisors are on-call resources for the entire class.

The Role of Mentors
As a mentor, you are an extension of the teaching team responsible for the success or failure
of one team with four students. In ten very short weeks your team has to 1) get outside the
classroom and test all their business model hypotheses and 2) if it’s a web-based business get
it up and running and if it’s a physical product, build a prototype.

Here’s what you are signing up for:

Offering your team strategic guidance and wisdom:
Offer business model suggestions
Identify and correct gaps in the teams business knowledge
Providing your team with tactical guidance every week:
weekly presentation before they present
Commenting weekly on your team’s Customer Discovery progress blog

Meeting one-on-one with the team at least twice during the class

If you can’t commit to the time to be a mentor, consider being an Advisor.

The Role of Advisors
As an advisor, you are a class resource for your particular domain expertise.

Here’s what you are signing up for:

Invitations to both Mentors/Advisors
You are welcome to attend any and all lectures

You’re invited to speak at a class for ten minutes on a subject of general interest

Course Goal: Lean Startups
Provide an experiential learning opportunity to see how entrepreneurs really build companies.
PAGE
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© 2012 Steve Blank

In ten weeks, teach a four-person team how to transform a technology idea into a venture-
scale business opportunity. Do it by having them get outside the classroom and test each
element of their business model.

The goal is not a business plan, revenue plan, 5 year forecast, etc.

By the way, this is the class that the National Science Foundation has standardized to teach

Mentors and Getting Out of the Building
The class is about teaching the students that the nine building blocks of a business model
are simply hypotheses until they actually validate them with customers and partners. There
are “no facts inside the building, they need to get outside.” This means as part of this class
they need to talk to customers, channel partners, and domain experts and gather real-world
data—for each part of their plan.

This can be a daunting and formidable task. To the best of your ability, help them network,
teach them how to send email and make phone calls and run customer surveys. Open your
rolodex to whatever level you feel comfortable.

Your role is to help the teams learn how to test their hypotheses about their business model.

Questions that are helpful are, “Have you considered x?” “Why don’t you look at company
z and see what their business model is and compare it to yours?” or “Here are some names

what to do.

-

about what they learned on the journey.

Mentors and Web-based Startups
If your team is building a web-based business, they need to get the site up and running during
-
sumptions about minimum feature set, demand creation, virality, stickyness, etc.

Students
Admission to the class is by interviews of pre-formed teams of graduate students. We’ll take
ten to twelve teams. The students are typically working on their Masters or PhDs in engineer-
ing or science; however the class is also open to MBA students.

The teams will self-organize and establish individual roles on their own. There are no formal

Deliverables:
Teams that select a web-based product will have to build the website for the class. Teams that
select a physical product must have a bill of materials and a prototype.

The teams will be blogging their progress in between classes. It is an integral part of their
-
tations.) Each time they post they must notify you. Please look at their posts in-between class and
give them feedback.

Lean Launchpad Course Organization
The course is organized around Alexander Osterwalder’s Business Model Canvas and Steve

Each week’s class is organized around:

A lecture on one of the nine building blocks of a business model.
Student teams present their “lessons learned” from getting out of the building and iter-
ating or pivoting their business model.

The Eight (3 hour) Class Sessions:

Session 1: Jan 10th—Course Introduction, Business Models, Customer Development

Schedule

PAGE
117
© 2012 Steve Blank

Textbooks
Business Model Generation -

Steven Blank, Four Steps to the Epiphany

Getting Prepared
The best way for you to get a feel of the course is to:

-

2. Download and breeze through the explanation of Osterwalder’s Business Model Canvas

-

Thanks once again for your support and participation,

Steve, Jon and Ann

Lean launchpad educators teaching handbook

Lean launchpad educators teaching handbook

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